Asking questions is an essential way to find meaning in information. Many leaders want to ask questions but don’t know where to start. Ideally, you ask questions based on your existing knowledge and the current context or situation. Therefore, every situation will have its own unique set of questions. However, to get started, some basic questions will work in any situation. They follow a simple question formula:
What is it?
What should it be?
What patterns do I see?
Does it matter?
All of these questions can help you find meaning. However, the latter questions will drive greater meaning. You generally can’t make a decision or take an action until you reach at least the third level. Therefore, I recommend that leaders spend most of their time on the third and fourth questions.
What is it?
The most basic way to derive meaning from information is to understand what that information is. I’m often surprised how little many leaders know about the basic mechanics of their metrics.
For example, one company had a “customer satisfaction” metric on their scorecard. I asked the managers what that metric meant. First I asked how the metric was calculated. They said it was based on the customer satisfaction survey. But the survey was based on a one to five scale and their customer satisfaction score was 85. Most didn’t understand how the score was converted. In addition, they didn’t understand what else was done. They were surprised when I told them that it did not measure customer satisfaction. The metric was a percentile ranking. It was telling them was how their satisfaction score compared against similar companies. This means that if all other companies were very bad, and they were just bad, they would be in a high percentile. Similarly, if all other companies were great, and their company was good, they’d have a low ranking. For the first time, many of them understood the metric and were able to derive meaning from it. One manager said, “My boss kept telling me that my customers weren’t happy because our score was below target, but when I talked to customers they seemed happy. Now I understand why. They are happy, they just aren’t as happy as they could be at our competitors.”
By understanding, what the metric was telling them, the managers were able to change their messages, decisions, and actions.
Understanding what a metric is specifically measuring is the first step toward creating meaning. Here are a few other questions you should ask to answer, “what is it”
· What is included and excluded from this metric?
· How frequently is the metric calculated?
· How is it computed? What are the factors that go into it?
· Is it a direct measure or a “proxy” measure
· Is it a relative or absolute measure?
What should it be?
Once you understand what the measure is, the next step is to understand what it should be.
If I were to tell you that I purchased a car for $5,000, you couldn’t make a decision or action. You need to have an idea of what it should be. If I tell you that the car was a 2009 Lexus (or a 1981 Chevy Chevette) you are now better able to create meaning.
Leaders should never look at information without an idea (which might be proven wrong) about what they expect to see. Several sources will help determine what the number should be:
· Company goals/targets
· Historical performance
· Benchmarks
· Current context (e.g., if you’ve just invested in a marketing campaign, you might expect that sales would be up)
The problem that many leaders fall into is confusing which number they should use. I like to look at this question from three perspectives: 1) What is a realistic expectation for our current performance, 2) What have we committed to, 3) What is possible.
Each one of those questions drives different decisions. The first question, realistic expectation, is probably the best for diagnosing and taking action. The second question, commitment, is best for understanding potential impacts on other issues (and impact on your bonus!). The third question helps you understand where there are opportunities for improvement.
By creating an expectation for what you should be seeing, you create a trigger point for taking action.
What patterns do I see?
Understanding what something should prompts action. But it doesn’t tell you where or what action to take. Understanding patterns will help isolate the problem.
There are two types of patterns to look for to create meaning: causal and categorical.
Causal patterns, as their names suggest, are patterns that show how one thing influences another. By understanding they key levers of your business, you can take action. For example, one organization found a pattern between time per service call and number of return service calls. They discovered that their technicians were cutting corners to hit their “time per call” target, which was driving down quality.
Categorical patterns highlight common themes. For example, a company discovered that most of its complaints came from stores in the same region. Replacing the regional manager had a huge impact on performance.
By understanding patterns, you will be able to determine where to focus your actions.
Does it matter?
“Does it matter” is the ultimate meaning question. It is the question that should be consulted first before launching a response to a problem. It’s also the question that I often see overlooked.
One organization was having a problem with parking in its facilities. Customers regularly complained to management and, on satisfaction surveys, rated parking extremely poorly. Additional analysis showed that, although customers were frustrated, it didn’t influence their buying decisions. They were so satisfied with the quality of the company’s product that they were willing to put up with the poor parking situation. It didn’t matter (in the grand scheme of things).
Had the company simply reacted, it could have wasted a lot of money investing in improving parking with no overall benefit. Of course, most companies want to make the overall customer experience as good as possible. So, why not improve parking? If everything else is working, perhaps this would be a good investment. However, if an investment in parking offsets an investment in something that matters more to customers, the organization has made a poor decision.
Ask questions
These four questions can provide the basis for better understanding your business and finding meaning. These questions aren’t just limited to interpreting data. They can just as easily be applied to discussions about career development, strategy, or any aspect of your business. The more meaning you create, the better your decisions and actions.
Tuesday, March 24, 2009
Thursday, March 12, 2009
Facts, trust, and Sergeant Friday
What do the following five events have in common?
· Police questioning of suspects/witnesses
· IRS audits
· Courtroom testimony
· Investor calls
· Doctor visits
They all typically seek “just the facts”. This makes sense. In a courtroom, the jury’s job is to interpret the facts; they don’t want them clouded by the witness. I think in most situations, when we are unsure of someone’s credibility or agenda, we tend to seek the facts. While it’s true that people can mislead with facts, there is something safer or more “objective” about getting the facts. In essence, seeking facts counters a lack of trust.
This happens in business as well. Many leaders don’t recognize this as a trust issue. They confuse trust with integrity. They trust their employees not to steal, cheat, or lie. But, this is a different type of trust. It’s trusting their thinking which is often much harder than trusting their actions. That’s where the most “trusting” leaders sometimes fall down. They view their responsibility as ensuring that the data and analysis are accurate. That is their responsibility but they can be more productive if they execute that responsibility differently. If a leader is asking his team to walk through every fact and analysis from start to finish, even in the name of due diligence, he is showing a lack of trust. In addition, he is not being productive.
First, it’s inefficient. If you believe that one person might get it wrong and one might get it right, it’s more productive to have the “right” person do the work in the first place. Second, it’s unempowering. If your people are simply conduits through which data flows, they aren’t adding much value. You aren’t leveraging yourself very well if your job is to do all of the heavy analytical lifting and thinking. Third, it slows down decision-making and taking action. Instead of starting the meeting from the point where the team left off, the meeting backtracks through the data. It might take half (or all) of the meeting to get back to that point. That’s not an efficient use of time or resources.
I’m not suggesting that leaders simply take everything they are told without question. I am suggesting that there is an alternative to being an auditor. If you focus on seeking understanding, you empower your team, keep the conversation moving forward, and uncover potential problems.
Test your assumptions, not theirs
As a leader, you should have a general idea of what the data might tell you. For example, if you know that your sales in Indiana have been struggling, you might expect the data to suggest a problem there. If your team’s analysis doesn’t show a problem there, you can then ask about it (e.g., “We’ve really been struggling in Indiana lately, how did they compare against these other poor performing states). At that point, you’ll either discover that Indiana is doing better than you thought or that your team forgot to include Indiana in their analysis (or that somehow their analysis was flawed). Any of these lets you take action. There’s no need to rehash all of the other information that doesn’t have an issue.
Ask for conclusions first, then ask questions to understand their analysis
Have your team start with the results. What did they find out? What are their recommendations? Suppose they found a quality issue. You can them ask them if the issue is consistent across all products/services or whether it is isolated to a few specific areas. You can ask what patterns they noticed in areas that have the problems versus those that do not. As before, you are still understanding their thinking without having them go through every piece of analysis.
The key is approach your role as understanding people’s thinking rather than auditing their process. Seeking understanding is what good leaders do. It keeps the conversation moving forward and it uncovers problems. Auditing their process is a sign of a lack of trust. It’s unempowering and unproductive. If you don’t trust your people to do the job, get someone else to do it. Repeating the process for your own comfort doesn’t help anyone.
Making data driven decisions isn’t just about having numbers and facts. It requires judgment, perspective, and context. The more you work with your team to hone their ability to combine those things with the facts, the better and more efficient your decision-making will become.
· Police questioning of suspects/witnesses
· IRS audits
· Courtroom testimony
· Investor calls
· Doctor visits
They all typically seek “just the facts”. This makes sense. In a courtroom, the jury’s job is to interpret the facts; they don’t want them clouded by the witness. I think in most situations, when we are unsure of someone’s credibility or agenda, we tend to seek the facts. While it’s true that people can mislead with facts, there is something safer or more “objective” about getting the facts. In essence, seeking facts counters a lack of trust.
This happens in business as well. Many leaders don’t recognize this as a trust issue. They confuse trust with integrity. They trust their employees not to steal, cheat, or lie. But, this is a different type of trust. It’s trusting their thinking which is often much harder than trusting their actions. That’s where the most “trusting” leaders sometimes fall down. They view their responsibility as ensuring that the data and analysis are accurate. That is their responsibility but they can be more productive if they execute that responsibility differently. If a leader is asking his team to walk through every fact and analysis from start to finish, even in the name of due diligence, he is showing a lack of trust. In addition, he is not being productive.
First, it’s inefficient. If you believe that one person might get it wrong and one might get it right, it’s more productive to have the “right” person do the work in the first place. Second, it’s unempowering. If your people are simply conduits through which data flows, they aren’t adding much value. You aren’t leveraging yourself very well if your job is to do all of the heavy analytical lifting and thinking. Third, it slows down decision-making and taking action. Instead of starting the meeting from the point where the team left off, the meeting backtracks through the data. It might take half (or all) of the meeting to get back to that point. That’s not an efficient use of time or resources.
I’m not suggesting that leaders simply take everything they are told without question. I am suggesting that there is an alternative to being an auditor. If you focus on seeking understanding, you empower your team, keep the conversation moving forward, and uncover potential problems.
Test your assumptions, not theirs
As a leader, you should have a general idea of what the data might tell you. For example, if you know that your sales in Indiana have been struggling, you might expect the data to suggest a problem there. If your team’s analysis doesn’t show a problem there, you can then ask about it (e.g., “We’ve really been struggling in Indiana lately, how did they compare against these other poor performing states). At that point, you’ll either discover that Indiana is doing better than you thought or that your team forgot to include Indiana in their analysis (or that somehow their analysis was flawed). Any of these lets you take action. There’s no need to rehash all of the other information that doesn’t have an issue.
Ask for conclusions first, then ask questions to understand their analysis
Have your team start with the results. What did they find out? What are their recommendations? Suppose they found a quality issue. You can them ask them if the issue is consistent across all products/services or whether it is isolated to a few specific areas. You can ask what patterns they noticed in areas that have the problems versus those that do not. As before, you are still understanding their thinking without having them go through every piece of analysis.
The key is approach your role as understanding people’s thinking rather than auditing their process. Seeking understanding is what good leaders do. It keeps the conversation moving forward and it uncovers problems. Auditing their process is a sign of a lack of trust. It’s unempowering and unproductive. If you don’t trust your people to do the job, get someone else to do it. Repeating the process for your own comfort doesn’t help anyone.
Making data driven decisions isn’t just about having numbers and facts. It requires judgment, perspective, and context. The more you work with your team to hone their ability to combine those things with the facts, the better and more efficient your decision-making will become.
Friday, March 6, 2009
Context on the cutting room floor
How much context do you provide when requesting reports or information from your team? Do you include information on how it will be used, what decision will be made or what you are looking for or expect to see?
If you are like the vast majority of the leaders with whom I’ve worked, the answer is probably “not much”. The result is a cycle of requests, wrong information, new requests, etc until everyone is frustrated.
Context isn’t just important for ensuring that you get what you need. Your people need context in order to make sense of the work they do, they information they process, and the events that unfold in their work environment. How often do your people execute the task or transaction without achieving the overall goal? If this happens alot, they probably are lacking context.
Beyond making sense, context also helps individuals find meaning in what they do. Meaning is an important motivator for employees.
Despite the importance of providing context, people seem to be providing less of it. A simple test is to ask employees if they know how the information they are providing or the work they are doing is used. You’d be surprised at how few do.
Time, or more specifically, lack of time, is the typical reason given for not providing context. People tell me that it is more efficient to dash off a request than to explain the context behind that request. We are all busy, right. Sometimes it is more efficient to send a request. However, in most cases, those time savings are eaten away by inefficient or incorrect work.
I’ve noticed a more subtle enemy of context – electronic communication. As we’ve moved from paper, to e-mail, to text messages, to “twitters”, message length has shrunk significantly. And, when message length shrinks, the first thing to go is context. Take a look at the most recent emails or text messages you’ve received. Most will be very transactional in nature. This isn’t a bad thing. Text messages and email are excellent vehicles for sending transactional/tactical messages. The issue occurs when leaders don't find other ways to provide the broader context. We are taught that meetings must be focused on decision-making. That’s good. Some meetings should be. But where do people receive the “big picture” in order to make good decisions in those meetings? It’s not in their email or text messages. It’s probably not in the voice-mails they receive during the day. It’s certainly not in the day-to-day transaction they perform.
Providing context requires a time commitment. However, more efficient work, higher quality work, and better achievement of goals typically offsets that investment.
If you are like the vast majority of the leaders with whom I’ve worked, the answer is probably “not much”. The result is a cycle of requests, wrong information, new requests, etc until everyone is frustrated.
Context isn’t just important for ensuring that you get what you need. Your people need context in order to make sense of the work they do, they information they process, and the events that unfold in their work environment. How often do your people execute the task or transaction without achieving the overall goal? If this happens alot, they probably are lacking context.
Beyond making sense, context also helps individuals find meaning in what they do. Meaning is an important motivator for employees.
Despite the importance of providing context, people seem to be providing less of it. A simple test is to ask employees if they know how the information they are providing or the work they are doing is used. You’d be surprised at how few do.
Time, or more specifically, lack of time, is the typical reason given for not providing context. People tell me that it is more efficient to dash off a request than to explain the context behind that request. We are all busy, right. Sometimes it is more efficient to send a request. However, in most cases, those time savings are eaten away by inefficient or incorrect work.
I’ve noticed a more subtle enemy of context – electronic communication. As we’ve moved from paper, to e-mail, to text messages, to “twitters”, message length has shrunk significantly. And, when message length shrinks, the first thing to go is context. Take a look at the most recent emails or text messages you’ve received. Most will be very transactional in nature. This isn’t a bad thing. Text messages and email are excellent vehicles for sending transactional/tactical messages. The issue occurs when leaders don't find other ways to provide the broader context. We are taught that meetings must be focused on decision-making. That’s good. Some meetings should be. But where do people receive the “big picture” in order to make good decisions in those meetings? It’s not in their email or text messages. It’s probably not in the voice-mails they receive during the day. It’s certainly not in the day-to-day transaction they perform.
Providing context requires a time commitment. However, more efficient work, higher quality work, and better achievement of goals typically offsets that investment.
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